May 30, 2024

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Technology and Age

Why Beam Global Stock Soared 115% in December

What happened

Beam Global (NASDAQ:BEEM) became the latest electric vehicle (EV) stock to catch fire as the company surged after announcing new patents related to EV charging and a new contract to deploy the technology. 

The news sent shares of the recent IPO flying higher, up 115% in December, according S&P Global Market Intelligence. The chart below shows the stock’s movement over the course of the month. 

BEEM Chart

BEEM data by YCharts.

So what

Beam had its IPO as Envision Solar in July, a microcap stock at the time. And the company, which makes EV charging technology based on renewable energy, has attracted attention in recent months, driving the stock up by multiples into small-cap territory.

A rendering of a electric vehicle charging

Image source: Getty Images.

On Dec. 3, the company announced a new patent for its UAV ARC recharging network, which provides en route charging for drones. The company believes commercial and military customers will be interested in the technology as the use of drones for package delivery and military operations proliferates.

The following week, Beam said it had received three new patents around its EV charging infrastructure.

Despite those announcements, the stock was quiet for the first half of December, but then began to surge after it said on Dec. 17 that Montebello, California, will deploy two of the company’s solar-powered EV-charging terminals to charge the city’s electric transit vans and other future EVs.

In the two days after that announcement, the stock jumped more than 25%, and that momentum seemed to drive it higher to close out the month as there was little news out on Beam for the remainder of December.

Now what

It’s important for investors to be aware that Beam is still essentially a development-stage company since it brought in just $1.2 million in revenue in the most recent quarter, which was down from the year before, and is losing money. Both factors indicate the stock is a high-risk play.

The pendulum on the momentum stock may also be swinging back now as shares plunged as much as a third on Jan. 4, the first trading day in the new year. 

Beam’s technology is certainly exciting, but further gains in the renewable energy stock at this point seem hard to justify without meaningful advances in the business.